Finding Text
Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). AL #93.441 SF-425 – Federal Financial Quarterly – These reports are filed on an annual and quarterly basis. It requires recipients to provide comprehensive information to ensure compliance with budgetary terms, federal regulations, and agency guidelines. AL #93.600 SF-429 – Real Property Status Report and SF-429-A General Reporting (OMB No. 4040-0016) - These forms are filed annually based upon the end of the budget period. The annual SF-429 is required for all grantees and must indicate whether the grantee has reportable real property. If so, a separate SF-429-A must be completed for each parcel of real property reported and accompany the annual SF-429. SF-425 – Federal Financial Quarterly & Annual Reports – These reports are filed on an annual and quarterly basis. It requires recipients to provide comprehensive information to ensure compliance with budgetary terms, federal regulations, and agency guidelines. AL #21.027 Project and Expenditure Report – Report on financial data, projects funded, expenditures, and contracts and subawards over $50,000, and other information. Project and Expenditure Reports are due on a regular, recurring basis after the Interim Reports. The reporting frequency and deadlines vary by type of recipient and total allocation amount. Condition/Context: During testing, the following was noted: AL #93.441 The Department was unable to provide 2 of 2 Quarterly SF-425 reports selected for testing. AL #93.600 The Department was unable to provide 2 of 2 SF-425 Quarterly reports, the SF-429 Real Property Status Report and the SF-429-A General Report selected for testing. AL #21.027 The Department was unable to provide the Annual Project and Expenditure Report. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, lack of controls and record retention, the Department did not ensure timely submission and proper retention of required federal reports. Effect: The Department is out of compliance with federal reporting requirements and amounts reported to federal agencies may be inaccurate. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – AL#s 93.600 and 21.027, see finding 2021-009. No – AL# 93.441. Recommendation: The Department should improve the controls over the reporting function, which includes the documentation, review, and approval of all required reports, and effective controls over the preparation of reports, as well as a monitoring function to ensure that controls are in place and operating effectively for report submission and retention. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.